Tax Day is April 15th. Claiming your exemption as a member of a healthcare sharing ministry is simple.
A taxpayer is only responsible for the Shared Responsibility Payment for those months in which they either had no insurance coverage or were not a member of a healthcare sharing ministry. This additional tax is calculated month-to-month on Form 8965.*
If you had coverage in all of 2018 or a combination of qualifying health care coverage and coverage exemptions for every month of 2018, you don’t need to file Form 8965.
The “Full-year coverage” checkbox that was on line 61 of the 2017 Form 1040 has been moved to the top of page 1 of the 2018 Form 1040 and retitled “Full-year health care coverage or exempt.” You will now check that box if you, your spouse (if filing jointly), and anyone you can or do claim as a dependent had qualifying health care coverage or a coverage exemption that covered all of 2018 or a combination of qualifying health care coverage and coverage exemptions for every month of 2018. If you can check the box on Form 1040, you don’t need to file Form 8965. If you or another member of your tax household was granted a coverage exemption from the Marketplace that didn’t cover every month of 2018, you will need to complete form 8965.
Line 61 on the 2018 Form 1040 Schedule 4 is where you are to report the amount of the Shared Responsibility Payment you owe.
*If a person was covered or exempt for any day of a month, this status applies to the entire month.
Claiming Your Exemption on form 8965 for Partial Year Coverage.
If you claim an exemption from the Shared Responsibility Payment tax as a member of a healthcare sharing ministry, you are also to report that exemption on Form 8965.
The IRS Instructions for the Form 8965 Worksheet asks for the code under which you are exempt. As a member of a healthcare sharing ministry, you have a Code ‘D’ exemption. Your tax return will not ask for the name of the exempt healthcare sharing ministry.
On Form 8965, leave Parts I and II blank. In Part III, for each member of your household, you will simply write the letter ‘D’ in the column titled ‘Exemption Type’ for each month for which you claim the exemption.
Follow these basic steps:
Step 1: Calculate your "Shared Responsibility Payment"
Step 2: Claim the months that you were a part of a healthcare sharing ministry as an exemption in Part III of Form 8965
Step 3: On line 61 of the 2018 Form 1040 Schedule 4, report the "Shared Responsibility Payment" you calculated
If you have your taxes prepared by a professional tax accountant, he or she should be familiar with these requirements.
Links to IRS Forms:
Click here: Form 1040
Click here: Form 8965 Worksheet
Click here: Form 8965
Click here: Form 1040 Schedule 4